Mortgage foreclosures on primary residences rise 27.5% to their highest level since 2017: 91.7% involve second-hand homes

17/09/2026 – ⏱ 7 min · By Realty Investor Editorial Team

This article is for informational purposes only and does not, under any circumstances, constitute investment advice or a recommendation.

For much of this real estate cycle, mortgage arrears have been the missing variable in the debate. With house prices rising at double-digit rates and employment holding up, default indicators had for years been at levels that barely merited comment. The mortgage foreclosure statistics published by the National Statistics Institute on 16 September 2026 add a nuance to that narrative. The number of foreclosures initiated on primary residences stood at 3,703 between April and June, 10.3% more than in the previous quarter and 27.5% above the same period of 2025. It is the highest figure since the first quarter of 2017, that is, in just over nine years.

What exactly these statistics measure

It is worth starting with the definition, because the figure lends itself to hasty readings. The INE statistics count the certifications of mortgage foreclosures initiated and entered in the Land Registries during the reference quarter. In other words, they measure the start of the procedure, not its outcome. The institute itself expressly points out that not all mortgage foreclosures end with the enforced removal—the eviction—of the owners: many procedures are halted by agreement between the parties, refinancing, sale of the property before auction or application of the protection mechanisms provided for in mortgage legislation. The figure is therefore an indicator of payment stress, not a count of families who have lost their home.

The second-quarter figures, from the general to the particular

Over the quarter as a whole, 7,141 mortgage foreclosures were initiated on all types of property, 8.3% more than between January and March and 12.2% more than a year earlier. Of these, 6,864 concerned urban properties—the category that includes homes—and 277 rural properties, the latter falling both quarter on quarter (-15.3%) and year on year (-19.5%). Urban properties rose 9.4% in the quarter and 14.1% year on year.

Within urban properties, 4,869 foreclosures concerned homes, 8.3% more than in the previous quarter and 20.9% more than in the second quarter of 2025. The breakdown by ownership is what explains the headline: 4,358 of those foreclosures affected homes owned by individuals, up 23.6% year on year, while those relating to legal entities stood at 631, with a quarterly fall of 3.5% and an annual rise of 5%. The rebound is therefore concentrated in private households, not in company balance sheets. Completing the picture are the 1,750 foreclosures on commercial premises, garages, offices, storerooms, industrial buildings and other buildings (+13.6% quarter on quarter, +4.2% year on year) and the 125 on building plots, which fell 41.3% year on year.

Second-hand versus new homes: an asymmetry that frames the data

The split between new-build and second-hand housing is probably the most informative detail in the report. Of the 4,869 foreclosures on homes, 4,574—91.7%—affected second-hand housing, with an annual increase of 23.3% and a quarterly one of 11%. Foreclosures on new homes, by contrast, were limited to 415 units and fell 0.7% year on year and 14.4% compared with the previous quarter. The divergence is clear: the deterioration does not come from newly built residential product or from transactions signed in recent years, but from the older housing stock with long-running mortgages.

The weight of mortgages from 2005 to 2008

The distribution by year in which the loan was taken out confirms that reading. Of the foreclosures initiated on homes in the second quarter, 15.6% relate to mortgages signed up to 2004, 15.1% to loans taken out in 2007 and 14.1% to those from 2006. Overall, the 2005-2008 period accounts for 46.7% of all procedures opened between April and June. Almost half of the rebound, in short, comes from contracts formalised eighteen or twenty years ago, under the lending conditions typical of the previous cycle: long terms, high financing percentages relative to the valuation and, in most cases, a variable rate referenced to Euribor. These are loans that have been on the books for decades and are now facing payment reviews in an interest rate environment very different from that in which they originated.

The regional breakdown

By autonomous community, and looking only at foreclosures on homes, Andalusia tops the table with 1,154, followed by Catalonia (1,079) and the Valencian Community (717). At the opposite end are La Rioja (13), Navarra (27) and Cantabria (31). The map largely reproduces that of the previous property boom: the regions with the highest volume of lending between 2005 and 2008 are also those contributing the most procedures today, a result consistent with the weight of those mortgage vintages in the total.

The financial context accompanying the data

The rebound is not happening in a vacuum. Twelve-month Euribor rose above 3% on 21 August and has posted daily readings above 3.1% in September, after closing August at 2.954%. On 10 September the European Central Bank raised its three official rates by 25 basis points—the deposit facility stood at 2.50%, the main refinancing operations at 2.65% and the marginal lending facility at 2.90%, effective from 16 September—in its second rise of the year, with inflation that the central bank itself projects at an average of 3% for 2026. For a variable-rate mortgage signed two decades ago, each annual review in this environment translates into a higher payment without any change in the borrower's circumstances. That is the channel through which a more restrictive monetary policy reaches household balance sheets, and the one that most plausibly explains why the deterioration is concentrated in the oldest vintages.

How to put the figure in perspective

A rise of 27.5% is striking, but the absolute level requires context. The 3,703 foreclosures on primary residences in the quarter are a nine-year high and, at the same time, a fraction of the volumes Spain recorded in the most acute phase of the previous crisis, when the statistics moved in far higher orders of magnitude. The year-on-year comparison also starts from a low base: 2025 was a year of lows in this series, which mechanically amplifies the percentage. What matters is not the level, but the change in the direction of the trend and its persistence in the coming quarters, which is what will make it possible to distinguish a one-off adjustment from a cyclical turn in the quality of mortgage credit.

Why this matters to the real estate investor

The data provide information in three directions. The first concerns credit risk: an increase in foreclosures signals that tighter financing has begun to filter through to the repayment capacity of some households, although for the moment in a limited way and concentrated in older portfolios. The second concerns supply: each procedure that reaches auction returns a property to the market, usually a second-hand home in a scattered location, a flow that, given its current volume, is unlikely to alter the aggregate price balance but may have an effect in specific local sub-markets. The third affects the cost of capital: a scenario of higher rates and rising arrears tends to raise the return that lenders require for developer risk, and that adjustment passes through both to traditional banks and to alternative financing channels.

For the developer and the lender, the breakdown between new-build and second-hand housing has its own reading. The virtual absence of deterioration in new residential product—415 foreclosures, falling year on year—suggests that transactions originated in the recent cycle maintain, for now, a different risk profile from that of the 2005-2008 vintages, with stricter lending criteria and more conservative loan-to-value ratios. This is an observation based on published data, not a guarantee about the future performance of any portfolio.

Takeaways for the investor

These figures should be handled with the caution their nature requires. They measure the start of procedures entered in the Registry, not completed evictions or actual losses for the creditor; the same property may generate a certification that never reaches auction. The series is quarterly and volatile in regions with few registrations, where variations of a few dozen cases produce very large percentages. And the year-on-year comparison rests on a historically low base, which should be borne in mind before extrapolating the trend. Past results do not anticipate future results, and all real estate investment carries risks of illiquidity, default and total or partial loss of capital.

In environments of rising rates and greater attention to the quality of the underlying asset, some private capital has in previous cycles turned to ways of gaining exposure to real estate other than the direct purchase of a property, including regulated crowdfunding formats, in which the analysis of security, terms and the structure of the transaction is decisive. This is an observed dynamic, not a recommendation. At European level, the activity of crowdfunding platforms is governed by Regulation (EU) 2020/1503 and, in Spain, by the implementing rules and the supervision of the CNMV.

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